Chrysler To Cut Subcompact Prices

February 11, 1986|By James Mateja, Auto writer.

Chrysler Corp. plans to slash about $1,000 off the base price of its subcompact Dodge Omni and Plymouth Horizon to make them the domestic auto industry`s lowest-priced 1986 model cars, according to company sources at the Chicago Auto Show in McCormick Place.

The pricing announcement is scheduled for Thursday.

In doing so, Chrysler would be the first manufacturer to lower its car prices to attract buyers rather than to offer cut-rate 7.5 to 8.5 percent financing plans.

To implement the price reduction, Chrysler plans to simplify production at its Belvidere, Ill., assembly plant, where the Omni and Horizon are built. Chrysler sources at the auto show said the changes would include building only four-door hatchback sedans and discontinuing two-door hatchback coupe models now sold under the Dodge Charger and Plymouth Tourismo nameplates. All cars in each model would be equipped the same and marketed at one price.

Sources at the show said Chrysler marketing strategists were still working over the weekend to determine if the final base price of the cars would be $4,995 or $5,495, which in either case would be the domestic industry`s lowest. At $4,995, the only car priced lower would be the mini Yugo imported from Yugoslavia and sticker-priced at $3,990. The base price of the 4-door hatchback Omni/Horizon is now $6,209.

Under the plan, there would be only two options offered on the cars: air- conditioning and automatic transmission. Sources said the new cars would not be ``stripped`` and would include a 2.2-liter, 4-cylinder engine, 5-speed manual transmission, rear-window defogger and AM/FM stereo radio.

Chrysler sources said that simplifying production at Belvidere to a single model and assembling all the cars with the same equipment would reduce production costs and allow lower prices.

Another reason for the plan, however, is to try to keep the Belvidere plant running at full capacity through December. At that time, Chrysler wants to close the facility for conversion to production of its new full-size C-body car, which is to make its debut midway into the 1987 model year.

The United Auto Workers and Chrysler are negotiating a contract that would allow the C-body car to be built at Belvidere. Chrysler has asked the union local at Belvidere to make work-rules concessions to ensure that the C- body can be built economically using high-tech automation, including extensive robotics.

But the union has insisted on a guarantee that the plant keep producing cars up to the time of the conversion. The low-cost Omni/Horizon plan apparently is an answer to the union demand.

In another move to maintain production at the plant, Chrysler reportedly plans to build two sporty 4-door hatchback Omni models at Belvidere starting in July. One is to be the GLH II and another a custom unit developed by noted designer-racer Carroll Shelby, who has done special-edition cars for Chrysler in recent years.

Chrysler officials were at the show over the weekend to gauge public reaction to two prototypes sneaked into McCormick Place unannounced under orders of Chrysler Chairman Lee Iacocca. The prototypes, which carry concept car labels, are the Plymouth Sundance and Dodge Shadow. Both go on sale in May as 1987 models.

Sundance is thinly disguised as a convertible roadster, and the Shadow is hidden under low-slung plastic rocker panels, flared fenders and a giant hood scoop.